That’s the title of an article published by the University of Pennsylvania Wharton School in April, 2011. It’s an informative article and its premise continues to be thought-provoking.

Interestingly, it states 97.2 percent of American firms conduct reviews compared to 91 percent of businesses globally.

Many workers are tormented by the very thought of performance reviews. That goes for many supervisors, too, in giving and receiving them. Some employees respond well to comments about their work. Many don’t.

In many cases, such workers have justification for their apprehension — especially, when the supervisor is biased, shows errors in judgment or is guilty of poor timing. Often, supervisors make up to 12 errors in evaluations.

The article astutely points out how some companies are successful because they prevent hostilities from occurring in annual reviews.

They perform multiple reviews during the year when projects are completed instead of surprising employees at the end of a 12-month duration.

That’s also what Millennials have come to expect from their upbringing – instantaneous comments about their work. The trick is to be balanced with adequate positive and negative feedback.

Red flags

So, performance appraisals can be unproductive. Bosses have a propensity to give better ratings to people they have personally hired. And there are other biases.

The article mention one disconcerting statistic from research by Sibson Consulting: Too much emphasis is placed on quantity, not quality of performance reviews. Because many managers aren’t professionally trained in the art of giving reviews, 58 percent of HR managers give their processes an average or failing grade.

This leads to a lack of trust between non exempt and supervisors. That’s why we experience debacles in oil spills, automotive recalls, and nuclear reactors.

Properly implemented performance appraisals are also tools to prevent cultural problems. (There are six steps to implement a cultural change for profits.)

Approaches of successful companies are also cited. Sibson Consulting conducts reviews at the conclusion of projects, and semi-annually with a focus on employee talents and how to put them to best use. A Toronto-based social software company, Rypple, makes it a practice to have real-time discussions, and executives seek feedback. As you might expect, employee appreciation and recognition, and coaching are a big part of the company’s HR approach.

The article also mentions the concept of “performance previews.” That’s the art of dialogues between managers and workers before the work starts on projects.

In many cases, such workers have justification for their apprehension — especially, when the supervisor is biased, shows errors in judgment or is guilty of poor timing.

360 reviews — pros and cons

It also discusses the pros and cons of 360 reviews – reviews by peers, subordinates, bosses and sometimes.

My sense: I’ve never recommended 360 systems to clients. The 360 system discourages congeniality and teamwork, and serves as a catalyst for tension from unwarranted competition.

Also, my experience suggests that performance reviews should not be fired. Companies are successful when evaluations are productively implemented. There should be informal real-time feedback. Bosses should immediately correct problems and recognize strong employee performances. I’d also suggest that bosses walk the floor twice a day – not to spy on employees but to have casual dialogues with open-ended questions to get better acquainted. Employees love it.

So, use performance reviews. Set goals about expectations of employee performance, coach your workers, and get feedback. Your organization’s performance will be maximized when you take good care of your assets – your human capital.

21 Quick Tips to Avoid the Dark Side of Management — News headlines from Seattle to New York are cause for some serious head slapping. The U.S. Equal Employment Opportunity Commission (EEOC) continues to be inundated with worker complaints. Even the U.S. State Department issued a critical report of an ambassador, a Seattle businesswoman who was a prolific fundraiser for the first Obama election campaign.

HR – Profit By Not Letting Your Stars Become Free Agents — Top performers in business have the same characteristics as great athletes, and it isn’t always about money. Top baseball pitchers always want the ball. Home-run hitters always want to be the go-to players, especially when their team is trailing in the last inning. They want to come through in the clutch, and they want to play for winners.

HR Management: Which Employees Are Most-Likely to Quit? — If you need help in retaining talent, an HR study contends there is a way to determine how to anticipate which employees are likely to leave, according to an article in CFODailyNews.com. The study by eePulse, Inc, the HR software company, contends there are four criteria of employees who are most likely to quit.

“Be nice to people on your way up because you meet them on the way down.”

-Jimmy Durante

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.